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Loan Shark

Access to credit is a major issue for low income families. Those with a stable and fixed income have little problem in securing credit especially in difficult times. However, ordinary people especially those in micro and informal business have much difficulty in convincing the bank or financial institution to borrow funds. Noting this gap, illegal operators on motorcycles offer people ready cash in the time of their need. In desperation the poor and low income families secure these loans which often turn into a night mare or even trade death. Often the borrowers do not realize the very high interest rates charged. The Malaysian Crime Prevention Foundation (MCPF) hosted a brain storming session on the issue of loan sharks and what needs to be done in addressing this problem. About 13 people gathered on July 12, 2006 at the MCPF Conference room. Datuk Dr Denison Jayasooria chaired the meeting. Tun Hanif Omar the former Inspector General of Police was present and he provided valuable intervention strategies on the theme and more specifically what can be done at the police level. Firstly, the representatives from the Ministry of Housing and Local Government explained the procedures relating to licensing of money lenders and the Ministry’s role in enforcement. There are two units at the Ministry, one that reviews all applications for licenses and the second on enforcement. On enforcement there are 23 officers and they are supported by a special unit of Police officers who have been seconded to the Ministry. Secondly, the discussion focused with regards to the difference between money leaders who are legal under the Money Lenders Acts and loan sharks who are illegal and therefore deemed as an illegal activity. A major area of concern was the interest rates and the methods employed to re At the root of the problem is the inability of ordinary people to urgently access loans when it is required. Loan sharks provide this service. Commercial banks and even licensed money...

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...Tropentag 2009 University of Hamburg, October 6-8, 2009
Conference on International Research on Food Security, Natural Resource Management and Rural Development
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Factors Affecting on loan Repayment Performance of Farmers in Khorasan-Razavi Province of Iran Mohammad Reza Kohansal Assistant professor of agricultural economic dep., Ferdowsi University of Mashhad, Iran Hooman Mansoori Msc student of agricultural economic dep., Ferdowsi University of Mashhad, Iran Abstract This study investigated the factors influencing on repayment behavior of farmers that received loan from agricultural bank by using a logit model and a cross sectional data of 175 farmers of Khorasan-Razavi province in 2008. Results showed that loan interest rate is the most important factor affecting on repayment of agricultural loans. Farming experience and total application costs are the next factors, respectively. Keywords: credit, agricultural bank, marginal effect, Logit model Introduction
Agricultural lending involves giving out of credit (in cash and kind) to small- scale farmers for the purpose of farming. There is no doubt about the crucial roles of credit in economic development. Agricultural household models suggest that farm credit is not only necessitated by the limitations of self-finance, but also by uncertainty pertaining to the level of output and the time lag between inputs and output....

...5. Federal Funds
Federal Funds represent the asset to lending bank and liability to borrowing bank. The loan in Federal funds is short-term loan. Usually, the loans are for one to seven days. These funds help the bank to correct short-tem fund imbalances. Federal funds rate is interest rate charged in the federal funds. It is same for all banks borrowing in federal funds market.
Federal funds market more active on Wednesday because that is final day of each particular settlement period for which each bank must maintain a specified volume of reserves required by Fed.
6. Federal Funds Market
Banks have to meet reserve requirements. Each Wednesday is the final day of each particular settlement period for which each bank must maintain a specified volume of reserves required by the Fed. When the bank does not meet the requirement, they have to borrow before settlement period ends. They can borrow in federal funds market.
7. Borrowing from Federal Reserve
Rate is charged is primary credit lending rate. It is set at a level above the federal funds rate at any point in time, so bank will only borrow from Federal Reserve as last resort
10. Use of Funds
Banks invest in securities because of the liquidity of securities. They can convert securities immediately Moreover, Investing in securities is easier....

...﻿Student Loan Case
1) Summarize the student loan industry. Answer with respect to both public and private loans and be clear as to which you are referring to.
a) What led to the inception of the student loan market?
The inception of the student loan market started like any other loan market, there were a large amount of borrowers who needed money now to invest in college to make more later that were matched with lenders who had excess funds and wanted return on the funds. The National Defense Education Act of 1958 which provided loans to students in higher education institutions started the student loan market. This was supposed to help train students to get jobs that will help them succeed and in turn help our nation succeed.
b) What major changes have occurred over the years?
The biggest changes in the loan industry have been the recent dramatic increase in enrollment at colleges. An alarming trend in the last twenty years is that appropriations to universities per full time student are going down while public four year tuition and fees are increasing. Total outstanding student loan debt, number of student borrowers and average debt per borrower has been steadily increasing over the last decade. Recent changes include private lenders becoming less inclined to lend.
b.i) Since 2004 both the number of student loan...

...Student Loan Debt: Is it worth it?
Many high school students are beginning their senior year and have already started to stress about how they will pay for their higher education. Although many students will have scholarships and financial aid, a lot more will struggle to pay for schooling and will have to take
out multiple student loans. Many people wonder if higher education is worth the debt the country and the students are in and it is, however, there are alternatives.
Thinking about the cost of colleges in The United States stresses out many of students every single day. A college cost continues to rise every single year and with that comes great struggles and stress. The average cost of college tuition has raised a whole eighty-two percent since the year 1980 (Shabazz 36). College prices are rising eight percent each year (Tuition Inflation).With college prices constantly raising more students will have to find ways to pay for their higher education. The cost of resident college tuition for a thirty hour college semester at Oklahoma University is approximately $9,000.00 (Oklahoma Estimated Cost for Resident Thirty Hours). This price, although very high, still does not include room and board or books. The estimated cost for tuition, room and board and books is approximately $18,500.00 (Oklahoma Estimated Cost for Resident Thirty Hours). For most students these prices are outrageously high and they cannot even...

...Student Loan Debt Relief
Student loan debt relief is a controversial issue in America today. Student loan debt affects twelve million college students, roughly 60% of all college attendees, per year (Student Loan Debt Statistics). Student loan debt relief rose to the forefront of economic news during the financial market crash of 2008. The U.S. Government has developed a debt relief plan that extends payments over a 25-year period, with a full forgiveness of all remaining debt at the end of that 25-year term (Ensuring That Student Loans Are Affordable). During this repayment period, payments can be suspended during times of unemployment, giving hardship students a break from their student loan payments. Many people feel that student loan debt relief is a good idea, and is the only answer for student loan borrowers that have fallen prey to our sluggish economy. There are others, however, that feel that student loan debt relief is unfair, and that students who promise to pay back their loans should be held to a strict standard repayment schedule.
A positive aspect of student loan debt relief is an improved future credit rating. Student loans have always been an issue for college graduates who did not qualify for financial aid, but the recent economic recession placed an extreme amount...

...﻿Student Loan Debt: Should We Forgive?
EN1123
Most Americans would agree that higher education is important. Compared to years ago, when a high school education was acceptable in most jobs, a college degree is now required in the majority of positions. But what if you can’t afford to get a degree? What then?
For many, student loans are the only way to finance one’s education. Paying out of pocket simply isn’t a reality for most, so they rely on state and national government to provide them the funds to attend school, buy textbooks, and even pay for room and board. Sign on the dotted line, and suddenly a subsidized or unsubsidized loan shows up as a credit on your student account. Any overage is paid to you by check to cover incidentals. This process gets repeated every semester, for as long as you attend school. It all seems very easy and acceptable - until you graduate (or don’t graduate, whichever the case may be). The day you leave school, a six-month clock starts ticking toward your first payment. Oh wait, you mean school costs money?
Sadly, some aren’t able to secure a position right away that can allow them the economic capability to start making payment on their loans. It can take up to two years for some college graduates to find a job. In the meantime, those loans are still due and payable. There are all sorts of possibilities for repayment: income-sensitive plans, unemployment...

...McBride Financial Security Online Loan Application Service Provider Policy
University of Phoenix
CMGT 441
* Introduction:
McBride financial services is a mortgage lender in Boise, Idaho. This company is specialize in conventional, FHA, and VA loans for home purchasing and refinancing. The company is planning to develop and expand into Wyoming, Montana, North Dakota and South Dakota (Apollo Group, 2003).
* Mission:
McBride Financial Services main mission is to be the top provider of mortgage services in a low cost in the its region and all branches Idaho, Montana, Wyoming, North Dakota, and South Dakota. Also McBride intends to offer mortgages to first time buyers and problem credit clients. The company will control its cost by having a small staff rather than large staff of brokers to sell the financing packages. Also they intends to make the customers enter their own mortgage applications online, and getting the approvals or denials electronically. (Apollo Group, 2003 )
* Concern:
McBride Financial services’ main concern is to ensure security for its customers’ financial online application services, and making sure that the online information is protected. In order not to involve into a lawsuit from clients because of identity stolen, McBride Financial will implement a kind of internal security system so every employee can access the clients’ information. McBride Financial is also concerned...

...offering illegal loans by charging higher interest rates. Doubled profits allow their business to continue operating despite the global economic recession. Oriented services such as shark's need to combat. Illegal moneylender promote their services with attractive offers such as instant and convenient loan without collateral while legitimate financial companies impose strict conditions and take a long time to approve the loan. In Indian society, illegal moneylender known as Chettiar, and was called the "Tai Ee Long" in Chinese and "loansharks" in the Malay community. Statistics show that the number of illegal borrow from loansharks is increasing from time to time. Because of these activities brought many disadvantages, the cause of this phenomenon must be identified and effective measures should be taken to overcome them.
There are several causes that make illegal moneylender services received. Among them is as easy approved loans illegal loansharks. This is because borrowing money from the bank require complicated procedures and strict conditions. Someone who borrow from illegal loansharks will get loan approval within a few hours compared with a bank that requires a long time to consider the eligibility of the borrower. Illegal moneylender also mendediakan loans to anyone...